New legislation will soon change the way in which
deposits are handled between landlords and their
tenants.
From 6 April 2007, landlords will only be able to take a deposit
from a tenant if it is protected by a Tenancy Deposit Scheme
(TDS).
Landlords will not be allowed to take any deposit unless it is
going to be safeguarded by a TDS.
They can choose to protect a deposit for their tenants
in one of the following types of schemes:
If a landlord lets to a family then the custodial scheme
may be a better option while those who own several
properties, or units in a property, may find either of the
insurance-based schemes more suitable.
Landlords have to tell tenants about the scheme where they
have chosen to place their money within 14 days of receipt of the
deposit.
At the end of the tenancy, if the landlord and tenant agree how
the deposit should be divided, all or part of the deposit will be
returned to the tenant.
However, if there is a dispute the landlord must hand over
the disputed amount to the scheme for safekeeping until it
is resolved.
If the landlord does not comply with the new legislation a
tenant can go to court to order them to pay the deposit into a
designated account held by an administrator.
The court can also force landlords to pay
tenants up to three times the amount of deposit within 14 days
of any order.
Failure to comply will also result in a landlord being unable to
serve notice to quit on the tenant in order to regain possession of
their property.
For further information please visit
the
Communities and Local Government (CLG)
or Dispute Service
websites.
